Chinese Ghost Towns? Get Ready to Feel Good About Being American Again
There’s been this fear in recent years that the U.S. government is a completely mismanaged mess. To some extent, that fear is warranted. After all:
- Our budget deficit is over a trillion dollars.
- Our total debt is over $14 trillion dollars.
- Our political leaders would rather hold the line than look for real solutions.
- Our GDP growth is smaller than hoped for coming out of the recession, at 2%.
…we do have some very real problems.
As we’ve struggled there’s been a lot of mention about China’s economic vitality. China’s GDP growth has hovered around 10% for many years and sits at 9.1% in the latest data release. There is talk about all of the debt and how the Chinese should be seen as a real threat to surpass the U.S. as the world’s economic leader.
And that’s why the following video on ‘Chinese Ghost Towns’ so intriguing. It was from an Australian news outfit, SBS Dateline. You can find the rest of the story and aerial photos here.
It’s a little over 14 minutes long, but I think you’ll find it well worth the time.
It appears that a great deal of China’s economic growth has been through the strategy of the government building massive cities and universities that there is no demand for. All of the materials and labor that goes into these massive projects improves GDP. Unfortunately, its led to an estimated 64 million empty apartment units in China that are too expensive for most Chinese families to afford (there is only a little over 30 million multi-unit housing units in the U.S.). Occupancy rates in these new cities are at less than 25%. And the ‘world’s largest shopping mall’ is almost completely empty.
There is even an aerial photo of the Yunan University – built to accommodate 2.3 million students. How many students actually attend? 11,000.
All of this could ultimately result in a few little problems for China:
- Massive government debt to build and maintain all of this when there is no demand for it and then eventually tear a lot of it down.
- A housing bubble that will be so big it could potentially bring down the entire economy.
- Civil unrest for the wastefulness of taxpayer dollars to create housing that nobody can afford.
- Complete degradation of an already poor environment and habitat.
If this is what it takes to maintain economic growth… then China has some big problems. You get the feeling when watching this eery video that China’s government is completely mismanaged and it’s only a matter of time before that house of cards comes crashing down.